Readers' comments

The visa-free border zone is beneficial to both sides: both tourism and trade are encouraging growth in the region. Kaliningrad still has a problem in that much of it is closed off from foreign tourists because of military reservation zones.On the Polish side the benefits to the local economy are all too visible.

Maybe in comparison to the Russian enclave of Kaliningrad (which really shouldn't be the benchmark).

In comparison to its EU peers, Poland has in fact one of the LOWEST labor participation rates (approx. 55 % of people of working age).

The only reason why the unemployment rate still isn't higher than 10-14 % (depending on the method applied) is because roughly 2-2.5 million Poles of working age have emigrated during the past decade.

If it wants to avoid falling behind again, Poland needs to liberalize its labor market, and attract immigrants -- why not primarily from neighboring countries such as precisely the Russian exclave of Kalinigrad, which are poorer but culturally close (and will hence integrate more easily than others)? It's not overly likely that Western Europeans will move in in large numbers.

Poland will possibly have to accommodate 3.5 million Ukrainian workers threatened by Putin to get kicked out of Russia, mostly Moscow and Leningrad, after Ukraine signs the EU Associate Membership Agreement. They're mostly well-educated and highly-skilled individuals with hardly any language and cultural barriers, as Poland and Ukraine are significantly closer culturally and linguistically than Poles and Russians. Ukrainians already work legally in Poland and are very highly valued by Polish employers.

Western for sure, but there are strong anti-Russian sentiments in the eastern part of it as well. Only the Donbas area inhabited by the Moscow-sent former communist party aparatchiks who managed that Ukrainian industrial complex, often referred to as "the Donbas nafia" Yanukovych is a former member of, are a few million strong pro-Russian lobby. The industry has been, though, taken over by the Ukrainian oligarchs who see greener pastures in the EU rather than in Putin's Russia, so the pro-Kremlin faction there is now subdued and financed only by Putin's agents.
Ukraine should also take advantage of the present and future Putin's problems with the Sochi Olympics that will come back to haunt him for long years to come.

The oligarchs don't go by the polls; they follow the money, and it seems that they perceive that greener pastures for them are in the EU, not Russia. They want their capital safe.
Take a look at Georgia. Bidzina who made his billions in Russia is now one of the strongest forces driving Georgia into the arms of the EU and NATO. People are not in power in Ukraine and the associated membership in the EU is a done deal. Tymoshenko will be most likely let go to Germany for a medical treatment at the last minute, perhaps under a kind of a gag order, because she didn't steal alone and if she had been put on open trial, Yanukovych would have had to put on trial with her, as the co-accused, a third of his cabinet. It may, however, bring a lot of lasting benefits in the long run, as there's no reason for Ukraine to save Russia's customs union from collapsing and bog down even deeper in the Putin culture of kleptocracy and corruption.

Not necessarily. The oligarchs aren't stupid and they will plough some of their money into modernisation and possibly striking joint venture deals with some cash-starved EU firms. Let's not forget that they're sitting on unimaginably huge piles of cash that will be safe from Putin, tax-deductible if invested and making even more money for them.
Russia's economy is totally obsolete and highly dependent on exporters of raw materials, mostly carbohydrates. It's arms export is roughly 10% of Gazprom's sales to the EU and 72% of export revenue is still generated by the sales of NG and crude. Russia will have to import food anyway as its climate doesn't guarantee stable agriculture.
Last, but not least, the ascension of Ukraine into the EU, even as an associate member, is generously poured with political and economic gravy in the hopes that it will help crush Russia's partial control of the EU energy supply even sooner than planned. Yanukovych and the oligarchs know that all too well.

Exactly, because they're obsolete. Once they start modernise and function in a more efficient way than now, their growth will slow down and the law of diminishing returns will set in. Russia, that isn't even a fraction as advanced as Germany, the UK or the US and still has a lot of inefficiencies that can be easily plugged up, has slown down to 1.4% or, as the most recent estimate made by the Elvira Nabiullina-led Central Bank of the Russian Federation projects, 1.2%, while the US economy keeps growing at the pace regularly exceeding three percent per year at near zero inflation, while the inflation rate in Russia and other customs union economies is 7% per year (Russia) and up (the rest except for Ukraine which isn't a member of it).

The problem in eastern Ucraine (in case of joining NATO, cutting links with Russia, etc.) are not just a few oligarchs. There are millions of people (not "few" millions) that are against these moves, and not only in eastern Ukraine: also in Crimea, and even in Odessa region (a port without traffic -from Russia, in this case- is a dead port...). It has been shown during the Yushenko rule, and not just once: opposition (very fierce indeed) to military manouvers with US forces (and even provvisional dislocation of US forces on the land), etc...

Secondarily, we were talking about cultural and linguistic links. They exist between western Ukraine and Poland, but not with eastern Ukraine at all (nobody speaks galician at Kharkhov, but all speak russian...)...

That is lamented in Kiev that the Ukrainian isn't spoken there and even Yanukovych prefers Russian to Ukrainian as an effect of its intensive Russification. As far as these "millions" are concerned there are about eight million Russians who often hold dual citizenships and are a strong pro-Russian lobby. They're a minority of less than 18% though.
Talking Crimea, there's no danger about the traffic to and from its ports, as the EU will be more than happy to use Ukrainian ports, especially in the situation where both Bosphorus and Dardanelles straigts are controlled by Turkey, a NATO member. Also the construction of two Ukrainian LNG regassing terminals on the Black Sea will bring more traffic to those ports, but it's not well-seen by Russia and its Sevastopol-based navy that, into the bargain, will be subject to Ukrainian searches at will every time its vessels, both military and merchant, enter or leave the base that will create possible conflict situations.
The anti-NATO demonstrations might have been fuelled by the Russian money and Russian elites who were sent there during the Soviet era, but who nevertheless are a minority and most Ukrainians want to be free from any outside influence.
My rational suspicion is that Yanukovych will try to drive the hardest deal with the EU he can get and Yulia Tymoshenko, who is far from being innocent, will be released and sent to Germany for surgery days or perhaps even hours before the signing of the association agreement with the EU in Vilnius.
Putin knows all too well that if Ukraine joins the EU, Russian influence there will be lost for ever and he'll have to seriously revise his dreams about restoring the Russian empire. This is a high-stake game Ukraine is winning so far.

"The anti-NATO demonstrations might have been fuelled by the Russian money and Russian elites who were sent there during the Soviet era, but who nevertheless are a minority and most Ukrainians want to be free from any outside influence"

Most of your points in this debate are well taken, and I agree that Yanukovych is trying to drive a hard bargain playing with the issue of Tymoshenko's release. But it will come, - he knows the stakes are high.

As to anti-NATO demonstrations in the Crimea there is no question they had been staged and financed by Moscow when the Kremlin saw it suitable to do so. Interestingly, the most recent visit to Sevastopol by a US navy frigate provoked no demonstrations at all.
It's important to note that the on-and-on-going negotiations between Russia and Ukraine on the replacement of several old Russian naval vessels and their crews on the principle of 'type-for-type' and crews-for-crews so far got nowhere. Russian admirals want modern vessels with modern armaments replacing 40 or 50 year old Soviet naval ships, a concept that Ukrainian negotiators strongly oppose. Yanukovych has apparently learned his lesson with the signing of the give-away long-term Sevastopol naval base lease.
Finally, its not just the Soviet era Russian military elite that had 'retired' and remained in the Crimea. Over the past twenty years thousands of Russians, former officers of Russian naval, air force and administrative staff in Sevastopol have managed to obtain Ukrainian citizenship while retaining the Russian one. That dual status makes them eligible for all Ukrainian-financed social services as well as the use of facilities provided for naval veterans. For Russian veterans retirement on the Black Sea coast offers huge attractions compared to spending retirement years in an expensive Moscow suburb, let alone somewhere close to the White Sea Russian naval base.

I try to do my homework and it's quite obvious and transparent to me that Russia's ham-fisted approach to Ukraine, Moldova, Georgia and even Belarus has backfired big time and sent Putin going around in circles. The departure of Ukraine to the EU and Belarus' flirting with China over its potash as well as quite possible embarrassment during the Sochi Olympics may trigger internal unrests in Russia that are, IMHO, long overdue.

Russia will have to import food anyway as its climate doesn't guarantee stable agriculture.
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I have news for you, boy. Not all Russia is beyond arctic polar circle (see Kuban for details). It's years already that Russia does not import grains. The one thing former soviet republics can do with their agrarian surplus is to export it, mainly in Russia (there is no bigger market at hand, except China, which prefers to buy lands in the third word and raise crops on his own, y'know...). So relax: you will not take Moscow by starvation...

BTW, former soviet republics depend on oil and gas (and mostly from their agrarian products and the market where sell them) even more than Russia. And why Russia finds so fun to ban their agrarian products? Right: because THEY can do without THEM...very more than the other way...

I agree, especially in light of its dwindling population. Nevertheless, nothing is written in stone and the former republics may decide to sell their food surpluses to China instead of Russia, as they started doing with their oil and gas. What will Russia do, sent its tanks there as it was and still is the case with Chechnya? BTW, the Chinese have already leased huge acreages of arable land in Ukraine.

The industry has been, though, taken over by the Ukrainian oligarchs who see greener pastures in the EU
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So if the process of economic integration with UE become a loss for Ukrainian industries (and agriculture too), for lack of competitiveness, loss of russian markets, new rules and consequent dificulties and costs, etc., not only people (who are "not in power in Ukraine": good to know...) but even oligarchs will have time and reasons for a second thought...
Pity it can be too late...

So did Russia and it keeps doing so, but Ukraine will have to democratise and dump Yanukovych in the next year election with the whole country overrun by the EU and Canadian parliamentarians and other observer groups armed with cameras and stalking all polling stations. Yanukovych knows it all too well and tries to hedge his bets.

The former republics may decide to sell their food surpluses to China instead of Russia, as they started doing with their oil and gas. What will Russia do, sent its tanks there as it was and still is the case with Chechnya? BTW, the Chinese have already leased huge acreages of arable land in Ukraine.
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Why in the hell chinese who leased acres of land in Ukraine to raise their own crops should buy and import ukrainian food?

Not necessarily. Royal Dutch Shell and Chevron are about to finalise their deals with Ukraine and the Baltics that can not only inject tens of billions of dollars into the Ukrainian economy but also make the country independent from Gazprom's gas supplies and sent the latter in a tailspin within less than a decade (http://www.ft.com/intl/cms/s/0/06fe2f60-3966-11e3-a3a4-00144feab7de.html)
President of the Czech Republic extended an invitation to Ukraine to join the Visegrad Group that is fastly becoming a vibrant economic and military subgroup within the EU and NATO and, with Ukraine as its member, wil have over 112 million population. Ukraine has been buying NG from Slovakia for some two years now at the prices paid to Gazpprom by Germany. It's political, so I wouldn't be surprised if the Group extended invitations to the Baltics and gained over seven million additional population of the group. Chevron, after having dumped its cooperation with Russian oil and gas companies has opened its offices in the Baltic states.

Ask the Chinese and the Ukrainians, but my rational guess is that the Ukrainians hedge their bets against possible Russia's reprisals for joining the EU.
Russia will have to buy things it buys so far form Ukraine elsewhere and most likely at higher prices while Ukraine associated with the EU will have enough cushion from world's largest tariff-free trade zone to absorb the potential shock.
My rational expectation is that Russia will stay as a lot of bark, no bite in sync with the prisoner dilemma theory. Russia won't get the same or better deals elsewhere.

Talking Crimea, there's no danger about the traffic to and from its ports, as the EU will be more than happy to use Ukrainian ports, especially in the situation where both Bosphorus and Dardanelles straigts are controlled by Turkey, a NATO member. Also the construction of two Ukrainian LNG regassing terminals on the Black Sea will bring more traffic to those ports, but it's not well-seen by Russia and its Sevastopol-based navy that, into the bargain, will be subject to Ukrainian searches at will every time its vessels, both military and merchant, enter or leave the base that will create possible conflict situations.
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Too many verbs at the future tense in this phrase...
ascthe EU will be more than happy to use Ukrainian ports, especially in the situation where both Bosphorus and Dardanelles straigts are controlled by Turkey, a NATO member
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As long as there is no open war between NATO and Russia, the fact that Turkey holds Bosphorus has relatively little importance, and can even be a mixed blessing (remember the August war: Turkey played the pedant guardian's role applying all the limitations on the transit of warships through the Bosphorus, and as a result, US ships arrived near Georgia coasts when the game was virtually over...). Turkey has his agenda (and his trade with Russia), and if sometimes it differs from the Washington's onbe, well...no wonder...
Regarding the traffic to and from the ports, yes, EU will be happy to use ukrainian ports (it would be strange the opposite). but the traffic from EU to Ukraine cannot be so much than it is now, and a chrisis with Russia (and a diminishing traffic from there) is not in the interest of Odessa and its region. That was why in that region (even if it is not exactly "east Ukraine") was against Yushenko, and can turn against Yanukovic, if he play the same tune of his predecessors...And even the odessites vote...

It's coming anyway. (http://news.kievukraine.info/ and http://en.info-kmu.com.ua/2013-10-24-000000am/article/4584904.html)
As you can see, Ukraine will be able to eliminate Gazprom's NG supplies within five years, for the EU doesn't see a problem with reselling cheap German NG back to Ukraine, and there's nothing Gazprom can either legally or practically do to stop it, as the pipelines are on the EU territory and will be incorporated into the EU integrated distribution network. Ukraine's 15 billion cubic metres of LNG regassing capacity expected to set in by 2016 and shale gas extraction will make it fully independent from Gazprom that theoretically can seek the repayment of now over $10 billion payments in arrears through the European Tribunal and the WTO, but filing a statement of claims would force the Russian NG producer to make public many strategic information items in the process of mutual discovery that Gazprom would rather prefer to keep confidential.
Summarising, Yanukovych and Ukrainian oligarchs play an extremely hard ball with both Russia and the EU.
As far as other than NG trade between Russia and Ukraine is concerned, the losses will be mutual if both trading partners start a customs war, China and Belarus will gladly pick up the slack left by catting back on Ukrainian exports to the Russian Federation while Russia's NG "truba" leverage and potential for blackmailing are already disappearing in thin air.

"It doesn't seem that Kaliningrad has too much to offer Polish customers used to shopping THROUGHOUT THE WHOLE EU".
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Spain is in EU, ain't it? So why polish customer don't go shopping there? For the same reason the Kaliningrad people don't go to Moscow, I presume...There is Ikea, Auchan, Gucci too...but too much gasoline, or air fares...

They travel without visas and often take temp jobs if they run out of cash. I know this first hand, but I don't have to work because I only need my laptop and a wide band wireless Internet connection to trade US markets once or twice a week, and make money from my hotel room.

What did you take that garbage from? I have considered you a serious partner, not a primitive spammer.
Poles don't need visas to any country in Europe neither they need work permits to work there. They can establish permanent residencies in any country of their choice within the EU and apply for employment insurance as well as social benefits if they decide to do so.
There's been, for over three years now, a programme of work exchange between Canada and Poland enabling Polish and Canadian professionals and students not older than 35 to work and study legally in both countries. Russia is getting more and more isolated from global economy as well as human exchange.

What did you take that garbage from? I have considered you a serious partner, not a primitive spammer.
Poles don't need visas to any country in Europe neither they need work permits to work there. They can establish permanent residencies in any country of their choice within the EU and apply for employment insurance as well as social benefits if they decide to do so.
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I do not deny any of the above. But you are talking of possibility of work, changing of residency etc. We start arguing about possibilities of SHOPPING. The polish "used to SHOPPING THROUGHOUT THE WHOLE EU"...a bit too enphatic, don't you see? They coud theoretically do it, of course. But I don't think they do (let alone be used to it). After all, why they should?
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Russia is getting more and more isolated from global economy as well as human exchange.
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Since frontiers are open, talking about "isolation" (especially compared with the soviet period) is enphatic too. A russian could have the same problem for live and work in USA as a french, perhaps plus the hassle of the visa (I don't know if a french need a visa to enter USA, but since the Iraq's days, it's possible too...). I have met many russians in my work (hotel industriy) who have a relative working in the USA (e.g., health services), and it is nothing tragic: no problem to go, no problem to come back. As far as EU is concerned, the easing of visa regime is going on. There have been already some "liberalization" for certain professional cathegories (students, sportsmen, scholars, entrepreneurs) and others will come. For some EU countries, Russians do not need visas even now. Nor there is any "isolation" on the web: no particular censorship on the sites which treat politically "sensible" themes (unlike in China), no "jamming" on western sources, etc. Even the problems with academic degrees are slightly less hard than before, even if this has required some changes in russian educational system that not all like (Bononia agreement, or something like that). So "human exchange" is quite fine. Regarding "global economy"...well, once burned (90es), twice careful...

Just to make a long story short, most Russians simply cannot afford going to Western Europe where, for one, a round fast train trip between the city and the international airport in Munich or Frankfurt a. Main costs $25 per person, dinner in a fast food outlet $15 to $25 and a night at the least expensive hostel at least $60 off season and a litre of petrol or diesel at least $2 in the city and $2.50 on the Autobahn. Do the math.

Russia is expensive because it operates an inefficient, mercantilist economy that heavily taxes (overtly or covertly) economic players. So despite an official 10% tax rate, distribution, and hence retail prices, are expensive.

Portuguese Biedronka, German Lidl, Swedish Ikea, French Auchan etc benefit from a more liberal economic system but also in turn contribute to lower prices, better quality and more friendly service. Seems like a good deal to me.

"Russia is expensive because it operates an inefficient, mercantilist economy ..." where a few politically well connected collect most legal or illegal profits that end up as part of $$ billions in annual capital outflow into offshore banks.

There was an interesting survey in The Economist a couple of weeks back on the Custo Brasil, all the costs and taxes which contribute to making Brazil so expensive. Although not quite as bad, the equivalent in Russia could be called the Tsena Rossiya. So despite being a huge country and market,which should result in economies of scale and lower prices, it's actually more expensive.

Exactly! There's an excellent episode of the Canadian CBC TV series "The Passionate Eye" aired for the first time exactly one week ago and titled "Putin's Road to Sochi" exposing rampant corruption, incompetence and disdain for all rationality in running business in a profit-driven and efficient manner. I'm not sure if the link's going to work in the UK, but it worked in Poland: http://www.cbc.ca/passionateeye/episodes/putins-road-to-sochi

Russia's expected growth 1.2%, the US's 3.5%. Let's not forget that most EU and all US are mature, consumption-driven economies while Russia and Brazil are still in the steep portions of their development curves. We cannot compare apples to oranges. BTW, the negative growth in the EU will hit Russia and Brazil back later as the demand for commodities will sharply decline in this recessionary period.

Russian oligarchs invest in the US economy as they're afraid to keep their money in Russia, so if the money of the Ukrainian oligarchs is safe in Ukraine, they'll likely reinvest it there.
BTW, the EU and the US may buy more Ukrainian goods than many expect. You never know, but the purchasing power is there, not in Russia that will most likely crank up its military spending at the cost of its population's well-being.

But they'll take the money out of Russia. BTW, Ukraine, as most independent and concerned with their national security states, should legislate the laws forbidding sales of controlling blocks of shares in publicly-traded companies to foreign interests or selling privately-held companies to those interests. The moist recent example is a series of unsuccessful attempts made by an Israeli-based Russian oligarch of taking control over Polish chemical conglomerate "Azoty" in Tarnow, Poland, contract cheap Russian NG and squeeze out other Polish chemical companies. Now, after the Ministry of Finance staved off two bids, "Azoty" struck a kind of deal with the US (don't know the details) on delivery of cheap LNG that is competitive price wise with cheap Russian NG. Where's a will, there's a way.

"... on delivery of cheap LNG that is competitive price wise with cheap Russian NG."

As of this year there are 19 countries capable of supplying LNG. Naturally, some work under long term contracts to say Japan or Korea, other offer spot prices to any willing buyer. The LNG market will become more and more competitive once more large size LNG carrying vessels are built. That's quite similar to fleets of huge oil tankers that facilitate oil trade all over the globe.

I wonder why there's no similar system between Russia (St Petersburg and Pskov regions) and Estonia? Sounds like a very good idea.

The biggest beneficiaries would be the poor Estonian border areas (incl mostly Russian-speaking Northeast) and even poorer Pskov area. St Petersburg people would get an easy access to Estonian shopping, beaches and spas.

With the border agreement between countries to be finalised soon, perhaps that could be the next step?

Actually, the EU and Russia were (still are) in the process of negotiating general visa-free travel between Russia & the EU. So, it wouldn't just have been St Petersburg - it would have been Moscow and the whole of Western Russia too.

As recently as July 2013, senior Russian politicians & officials were making frequent announcements (they like to brag). Lately, they've gone quiet - the EU has cooled due to Russia's bullying of Ukraine & Armenia.

Except you have failed to state that whatever decline in population there is it entirely due to attractive opportunities in the Scandinavian countries with their high living standards. The term 'nightmarish' refers to what the Russians could possibly offer.

> attractive opportunities in the Scandinavian countries with their high living standards
The "attractive opportunities" you're talking about: cafe waiter, car washer or WC cleaner?
However, even this is much better, than the "opportunities" available due to the glorious economic "success" of their present government.
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Etherogenesis of purposes: Estonian governments Always tried to get ridd of russian population ("alien"'s passport, compulsory learnong of estonian Language to obtain citizenship -and work for the State- even for those who were born in the country, and other lesser nuisances), and there are the thoroughbred estonians who pack and go...

But ethnic Russian population keeps shrinking by attrition at the pace of one million a year and is replaced at an alarming speed by other ethic groups of the Federation with positive natural growth rates.

Are you surprised after so many decades of forced Russification? The same's been going on in Latvia for over a decade and, surprise, surprise, ethnic Russians from Latvia and Estonia, mainly physicians, scientists, engineers and other highly qualified professionals prefer to come to Canada or the US instead of returning to Russia. Isn't this telling?

Polish people enjoy greater prosperity, better employment prospects, and have access to most of the brands and businesses available anywhere else in Europe. What's wrong with that?

Also, any Polish Entrepreneur has free & unrestricted access to the entire EU+Turkey single customs area and market of nearly 600 million people. Over time, ever more Polish businesses (the most productive ones) will expand internationally (creating higher incomes where they do expand, while also returning profit to Poland).

More important than raw unemployment,
(1) Poland has a higher workforce participation rate
(2) Poland has higher hourly wages, both in real and in nominal terms
(3) Polish workers do have freedom to develop careers anywhere in Europe (either temporarily to build professional networks & skills, or permanently where that improves personal prospects)

"Don't care, what all net profit and valuable resources go to metropolis"

I find your concept rather strange. First, "net profit" by definition is AFTER all salaries, wages, taxes, fees, contracts, etc. etc. have been paid to the host country, city, region.

Second, multinational corporation with their accumulated management skills, reduced costs due to purchasing volumes, marketing experiences, etc, etc. bring competitive products usually at lower costs to a wide cross-section of the host country consumers.
Third, the 'metropolis' you are so concerned about is represented in a great majority of cases by PUBLICLY listed corporations with openly traded shares on world stock exchanges. Nobody prevents you from becoming a direct beneficiary of the cumulative skills of such companies as Ford or Toyota, Wall-Mart or IKEA, BMW or Shell, and hundreds or thousands of others.
And yes, these corporations do pay NOT so 'tiny' salaries provided you have the required skills and experience. That's called competition for valuable management talents.

And the profits are taxed in Poland unless they're reinvested in Poland. It's called net foreign investment. If my memory serves me, since 2008 on average $70 billion of net investment capital has been annually syphoned out of Russia, mainly to the EU and the US. Got it trillium?

At least in the foreign policy realm - unqualified thumbs up for the Polish government and Radosław Sikorski. Peace on the western border, openess on the eastern/northern one - to both Ukraine and Russia.

Hi Forlana. It's not that I'm against border trade, it's obviously beneficial to both sides. I would also add that so far I've found drivers from Kaliningrad to be more careful than the locals, let alone those with Warsaw number plates.

But when you say "unqualified thumbs up for the Polish government and Radosław Sikorski", forgive me if I throw up. I mean such exclamations should be confined to communist era television.

Besides, you should know that if Putin decides to do something sensible, it's not because someone like Radek persuaded him, it's more like because he might want people like you to say "unqualified thumbs up for the Polish government and Radosław Sikorski", and something else, into the "bargain". Ask Russia about letting Polish ships sail out into the Baltic via the Vistula Lagoon, remove missiles from the neighbouring enclave or at least mind her own business if Nato wishes to deploy such missiles in Poland, and Radek, like the rest of the current government is less than totally useless.

@trililium, you're absolutely right, even Biedronka is foreign owned. But that still doesn't explain why Russians have to travel to Poland to do any decent shopping? I might complain that international supermarkets are taking business away from Polish shopkeepers, but I can always cheer myself up when I think that not so far away the situation is even worse and the potholes are even bigger.

"But that still doesn't explain why Russians have to travel to Poland to do any decent shopping?"

I'm pretty sure everything is okay with decent shopping in Kaliningrad. The reason why Russians go to Europe for shopping is prices.. Usually in the EU food an all other stuff are cheaper, so people go to Poland, or from St.Pete to Finland.. Many Russians, including me, like to buy clothes and some other stuff in Germany, or France, or Italy, because it might be 30-40% cheaper than in Moscow, and we also get tax refund. Though all big Russian cities are full with supermarkets, an new big shopping centers full of international brands..

Please don't play Josh d Flowfall distortions game with me:))
I said "At least in the foreign policy realm". It was a qualified thumbs up :)))
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Please note that in this specific case you have agreed - the transborder trade and visa-free travel is a good thing. And certainly inhabitants of Kaliningrad are not responsible for Putin's follies - many would in fact prefer to become EU members. Why turn our backs on them? So why a knee-jerk criticism of yours? Putin deciding to do something sensible is one thing - Tusk/Sikorski deciding to do something sensible is another thing.

As to communist era television - I don't remember it so well, maybe you can tell me more how was it. Did it praise Radosław Sikorski when he worked for The Observer or Sunday Telegraph, the most outstanding pro-communist and pro-Soviet media in the known world? :/ Did you throw up then, my brave fighter for Polish liberty from the world of 21 century?

Hi Forlana, I suppose above-counter border trade can only be a good thing. But lifting visa restrictions is hardly the be all and end all of foreign policy. Neither is the lifting of even more important agricultural produce trade restrictions, because you should know that they can be reimposed at the bat of a Kremlin eyelid (and have been during Radek's term). It's all part of a far larger stick and carrot game, and really nothing to get excited about. It doesn't prove anything, and not wishing to bore you, I'll only say that on the other end of the scale,the catalogue of Sikorski/Tusk failures with regard to Russia is mindbogglingly long.

Communist era TV did not praise Radek Sikorski, because at the time he wasn't officially in the government.

The reason of higher prices in Russia is very easy to explain - heavier administrative and bureaucratic burden on the business and corruption make the costs higher. And we are not the part of EU, so we have all this custom stuff etc. Also many Russians believe that European producers make products of better quality for local market, and export to Russia the same products of worse quality. There are more reasons - bigger distances between cities, less developed transportation infrastructure etc., but all these are consequences of corruption and bureaucracy.

Again I can only agree with you. Bureaucracy and corruption go hand in hand, but I have to add another pathological ingredient: the lack of proper democratic control. That's what's slowly but surely also destroying the EU, but in Russia it's traditionally much worse.

As the base for the Russian Baltic Fleet (the Baltiysk port being Russia's only ice-free port in the Baltic Sea), Kaliningrad has a great strategic importance for Moscow. It used to be a closed zone during the Soviet period. Agriculture was encouraged to minimise the need for food imports. The collapse of the USSR caused a collapse of the economy with soaring unemployment, rising organised crime and drug trade.

Tax advantages granted by Moscow attracted some investments including, in 2007, a new $45m airport terminal. However, by 2010 unemployment climbed to over 10%, significantly higher than the Russian average. While the new visa regime will increase one way travel to Poland, it increases the risks related to smuggling of both goods and people.

It's worth the risk. Smuggling isn't such a big deal. Russia's bureaucracy and high taxes make goods expensive even in Kaliningrad (relative to Polish prices), except drugs, stolen government equipment (e.g. guns & munitions) and prostitution. No loss.

Kaliningrad's (and St Petersburg's) very real cultural and economic integration in Europe is important for future alignment of interests, mutual security and mutual prosperity.

The present Russian government is a wasteland of corruption, is abusive towards neighbouring states and meddles deeply in internal politics (to the subversion of rule of law or human freedom). But if the Russian middle class grows to gain control over the political system, that won't always be the case.

It's important to build mutual good relations and affinities *now* - openness for Kaliningrad is an indispensable part of that.

The present Russian government is a wasteland of corruption, is abusive towards neighbouring states and meddles deeply in internal politics (to the subversion of rule of law or human freedom).
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And the former?

The present Russian government is incomparably better than under communism.

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In a comparison that should never be made lightly, Stalin ranks every bit as bad as Hitler.
- Stalin allied with Hitler to make the Second World war militarily possible. (Hitler was cautious and feared a war on two fronts- he would not have invaded Poland without Stalin's eager cooperation.)
- Stalin conducted his own mini holocaust (or Pogroms) against Jews
- Stalin killed even more of his own people (in unnecessary famines, forced labour and concentration camps) after WWII than the Nazis killed during it
- Stalin imposed ethnic cleansing
- Stalin was brutal - over time he killed several hundred top communist party members and generals because of fear over loyalties
- he insisted on absolute power, and cultivated a popularity cult

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You really can't compare Putin with the late communist leaders either. The final communist leaders (moderates compared to Stalin or Khruschev), included Brezhnev (certainly earned "Evil Empire" metaphor), then Andropov (the guy that called tanks to Suppress Hungary's uprising, championed the KGB & demanded further military suppression), then Chernenko (propaganda guy; he conducted the grandest wire-tapping operation ever and used that to blackmail officials across the Warsaw Pact & USSR - the only good thing he did was get sick, and choosing a relatively weak/ less "communist" step-in while he was in hospital - Gorbachev - so that his own position wasn't at risk).

Gorbachev (a man of non-violence, democracy, open uncensored criticism, regional & national autonomy and economic reform) was the first good guy (and non-demagogue) that the communist party ever had (unless you excuse the early revolutionaries). And Gorbachev is the only Soviet leader that could perhaps be compared positively with Putin.

Again. In a petty and problematic rather than an inhuman & brutal existential sense, the present Russian government is a wasteland of corruption, is abusive towards neighbouring states and meddles deeply in internal politics (to the subversion of rule of law or human freedom). If Russia's middle class gains control over government, this will change.

' If Russia's middle class gains control over government, this will change.'

That's a big IF ! Every time some Russian 'class' gains control, it becomes (to use your terms) a 'wasteland of corruption' and subversion of the rule of law.

No one has yet managed to explain how could the Russian society 'produce' well over 100 billionaires (as listed by Forbes) under the Putin regime in the past ten years ?
And how many more are 'undeclared' billionaires ?

Indeed, a scary pace of amassing vast wealth, all the more so given the lack of innovative consumer products or capital goods emerging in Russia (there are some, but not enough to justify 10 billionaires let alone 100). Almost all of that wealth was ill-gotten.

My hope is that (1) with a growing majority of Russians spending ever more time online, (2) with increased online leaks, transparency & open discussions/ polls, (3) with social media facilitating rapid distributed organization of people and (4) with increasing levels of education, wealth and exposure to the west...

Putin's successor might, fear for his/ her own safety (Assad?) and therefore institute legal reforms and cleaner, more inclusive politics regardless of the political risks. Independent courts are actually a very nice thing, if you fear losing an election to the opposition.

the present Russian government is a wasteland of corruption, is abusive towards neighbouring states and meddles deeply in internal politics (to the subversion of rule of law or human freedom). If Russia's middle class gains control over government, this will change.
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I've said "the former", not "the formerS". I had in mind the "democratic" Eltsin.
- US-"advisored" economic reforms ("shock terapy", more the first than the last -old joke, but real-...)
- Bombs over parliaments (and new "constitution" tailored on him by US "advisors" -again...- with more power for him, to the detriment of parliament).
- First chechen war (dirty, ill-decided, and lost...).
- Corruption...never mind (the "family", the "privatization", the "semibankirshina" -"all the power to the oligarchs"-, etc.)...

The Russians are right when they say they were thoroughly screwed by the IMF, World Bank & US under Eltsin.

There was absolutely no attempt to open Western markets to Russian exports, nor to invest or expand modern consumer & capital good production in Russia. Nor was there sufficient emphasis on building a modern and efficient tax system, or a strong and independent legal system.

Eltsin probably meant well - but he was neither competent nor much of a tyrant.

'There was absolutely no attempt to open Western markets to Russian exports, nor to invest ...'

Exports of what ? Babushka dolls ? Soviet style fur-trimmed hats ? I am not kidding, I visited Moscow during that 'transition'. Europe's markets for Russian gas were open. Beyond that, there was a huge surplus of Soviet made arms and military hardware everywhere in Eastern Europe and in Asian Stans. Europe did not need any.

It would have been better if there had been deliberate efforts to attract large volumes on investment from VW, Toyota, GM, petrochemical companies, pharmaceutical firms, P&G, Kraft, Boeing/Airbus, etc. Efforts in that direction would surely have required precisely the legal reforms necessary for engendering domestic entrepreneurial growth.

"bombs over parliaments" ? Did you mean
a revolt by Yeltsin's chief rivals, the Speaker Ruslan Khasbulatov and Vice President Aleksandr Rutskoi, and other so-called 'lawmakers' who barricaded themselves in Moscow's White House ? Would you rather have preferred Rutskoi as president ?

It's Khasbulatov and Rutskoi who incited armed gangs to attack the Ostankino TV studio, the Moscow mayor's office etc. Yeltsin had no option but to declare a state of emergency and ordered the army to restore order.
The alternative was a replay of the October 1917 scenario in Petersburg.

there was a huge surplus of Soviet made arms and military hardware everywhere in Eastern Europe and in Asian Stans. Europe did not need any.
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Really? I know that german "Bundesluftwaffe" was quite satisfied to get the former-east-german Mig 29 (made in Russia, of course). They were quite state-of-the-art fighter planes ("fly-by-wire", etc.), indeed...
Besides that, the point was not so much to open the markets to russian products. The mistakes were on a quite bigger scale, not so much about economics (besides the support to oligarchs by some western financial instututions, and, of course, the ill-fated "shock-terapy" and other "advisored" policies...), but politics ("eat and shut up", etc.)...

"bombs over parliaments" ? Did you meana revolt by Yeltsin's chief rivals, the Speaker Ruslan Khasbulatov and Vice President Aleksandr Rutskoi, and other so-called 'lawmakers'
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The "so called lawmakers" had been elected by the people to make laws, and they tried to do it, but the "liberal bolsheviks" who surrounded Eltsin ("Market, market, glorious market...") had their agenda (the same of "advisors", of course), and they dismissed the people's representatives in order to get it home. The parliament had prepared a law for the privatization who were by far less traumatic (and swindle-prone) than the "voucherization" promoted by the "liberals", but the last ones pushed forward at the last minute their "ukaze" (decreet) to impose the "vouchers way" (with all the consequences it had later: virtual deindustrialization of the country, round up of vouchers for a song by "certain" persons, etc.). This triggered the reaction of the MOP, which for some days simply occupy the parliament's building (the "wite house" of Moscow). The attack to Ostankino was surely a mistake, and as is said, in war and in chess games, who makes the last mistake, looses. But many things of those days (attack to Ostankino included) are still unclear. And likely, so forever will be...

My hope is that (1) with a growing majority of Russians spending ever more time online, (2) with increased online leaks, transparency & open discussions/ polls, (3) with social media facilitating rapid distributed organization of people and (4) with increasing levels of education, wealth and exposure to the west...
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As far as I know, all these conditions are quite satisfied right now. Russian internet (runet) is quite alive and kicking, compared to chinese (let alone saudi), and even very more transparent (and debating, even tactlessly...) too, with all the consequences (quite free and uncontrolled stream of data, informations, etc.). The "exposure to the west" depends only on how much anyone wants to be "exposed" (films, books, websites, etc.): you can take the horse to the water, but you can't get him to drink (and not all of them want to "drink", for sure: the 90es, y'know...). From this point of view, there's nothing more anyone can do, or even wish.
THe rest is more "official" (and slow to obtain). I agree that independent courts are important, and the way has been taken (at least in the civilian field), but there're many rivers to cross...On the other hand, it has always been a slow process, in many other countries (USA -and post-war Italy- included). It takes at least a decade (if not a generation), not some years...the hardest is to stop waiting orders "from above"...or even anticipating them...

Internet use in Russia is still far below the levels of Northern or Central Europe. But that difference is because very low proportions of Russians over 40 use the internet, while younger Russians show similar patterns to Central Europe.

With a generation, let's pray that the legal system cleans up. (Will new graduates have a lower tendency to corruption than those abused by decades of communism, or starved by the 1990s?)

But beyond the legal system, generation change matters for broader social attitudes too. Putin dominates the grey vote in Russia.

It's now 14 years since communism fell. Give it another 25 years, and the Soviet-tainted workforce will be a small minority. Perhaps that's the timeframe in which Russia can best aspire to liberty, prosperity & western integration?

"Russian internet (runet) is quite alive and kicking, compared to chinese (let alone saudi), and even very more transparent (and debating, even tactlessly...) too, with all the consequences (quite free and uncontrolled stream of data, informations, etc.)."

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Internet use in Russia is only, arguably (though I probably fall on the side of agreeing with you), more transparent than in China for two reasons: a) the Chinese spend more on their internet censorship capabilities (they have roughly 1 full time active duty censor for every 200-300 internet users), and the censors they do employ are more efficient. I wouldn't say that this transparency is intentional though. If the Russian government had the same technological capabilities as the Chinese to do so, they would use them.

Now with the Saudis on the other hand, you are quite right. They're living in the 7th century.

Talking about 'mistakes on a bigger scale' in Russia's present 'trade policies', its useful to focus on the latest example of Russia's taxation of foreign car imports. This measure was clearly designed to provide a competitive advantage to Russian domestic car makers while offering fictional market 'advantages' to practically non-existing car imports from Kazakhstan and Belarus.

The EU has just launched a complaint against Russia under WTO rules, dealing with a controversial 'car recycling' tax imposed by Moscow on foreign cars, -on West European, American, Japanese, Korean cars - except for imports from Belarus and Kazakhstan, both members of the Russian-led Eurasian Customs Union.

According to some media, these Russian "car recycling taxes" run between €420 to €2,700 for new cars, and anywhere up to an exorbitant tax of €17,200 for used cars imported into Russia. The fees are said to have generated €1.3 billion for the Kremlin's budget since their introduction in September 2012. The negative effect of the taxation measure includes (a) higher consumer prices on much demanded imported cars and components (b) declining volume of annual business for independent Russian car dealers, suppliers of parts and repair shops, lower employment in a vital service sector;
(c) artificial market 'protection' for a few uncompetitive Russian car producers unable and unwilling to modernise their manufacturing and marketing practices while shedding tens of thousands of surplus workers living on subsidised wages.

The EU is likely to pursue its complaint under the WTO rules that provide for imposition of countermeasures in the form of taxes on other imports of Russian- made products. A trade war ? Maybe not, because taxing Russian 'Stolichnaya vodka' and canned Arctic fish would have little effect on the overall trade volume.

Somehow you see an 'agenda' when you speak of Yeltsin, but no AGENDA when you speak of Khasbulatov and self-declared 'President' Aleksandr Rutskoi, both would have been hanged by such Kremlin rulers as Kosygin, Brezhnev or Andropov. Stalin would have shot them right on the spot.

According to some media, these Russian "car recycling taxes" run between €420 to €2,700 for new cars, and anywhere up to an exorbitant tax of €17,200 for used cars imported into Russia. The fees are said to have generated €1.3 billion for the Kremlin's budget since their introduction in September 2012. The negative effect of the taxation measure includes (a) higher consumer prices on much demanded imported cars and components (b) declining volume of annual business for independent Russian car dealers, suppliers of parts and repair shops, lower employment in a vital service sector;
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As far as I know, there are no such taxes for foreign firms' cars produced in Russia (and there is plenty of them). The goal of it is clear and sound: let foreign firms produce car in Russia and sell them there, "na sdoròvie": they get money, and russian car workers and thechnicians in their russian factories keep the workplaces (and get skilled for state-of-the-art productions). Win-win situation. Regarding the used cars, why russian marked has to be flowed by western "reminders" (or "remnants", if you wish)? It happened in the 90es (I remember the intercity buses then were "recycled" touristic coaches from Germany, with still the old agencies' names on them), it's logic the russians don't like to see it again. However, these judicial brawls are the norm in the international relations, (especially between EU and USA: GMO, the Microsoft case, etc.), even without blaming russians "specific" attitudes, but they are not "politics". Let the lawyers do their games...

WHatever the Khasbulatov's and Rutskoy's agenda was, they were at the head of the people's representatives, and, on the other hand, their possibilities to really go "back to the USSR" by the use of force were pitifully scarce (their position reminded more the gallant but doomed "dekabrists" than Lenin in the fatefull october...). The reaction of Eltsin to their move was rough enough, to use an euphemism, without any other "execution line" (at least 624 people killed or wounded). And if he would have gone a step beyond on that line, it would have been really hard for Clinton to praise him as he did talking about "democracy" and so on (BTW, Clinton praised Eltsin even when he started the first chechen war...see what means to be "our SOB"...or to be hold as so...)...

Within the next 10 years oil and gas will be even cheaper than today and Russia is almost doomed to lose most of the EU markets after two mid-winter show-downs about Ukraine not paying for and stealing NG from the pipeline running through its territory. The pipeline crossing Ukraine pumps now NG from Slovakia at prices 30% lower than Gazprom charges Ukraine, the nord stream pipeline runs at 60% of its capacity and the blue and south stream pipelines are dead in the water, as not a single bank wants to extend financing to Gazprom. Talking Gazprom, its share value has dropped by some 80% since 2008.
Ukraine is building two LNG regassing terminals on the Black Sea at the combined regassing capacity of 15 billion cubic metres per year, and Poland is about to have 7.5 billion a year regassing capacity in his plant in Swinoujscie. Both countries as well as most of the EU countries have significant reserves of shale gas and, if push comes to shove, they'll start extracting it.
Russia will be forced to introduce radical reforms or face a round of violent unrests. The close to $70 billion price tag of the winter Olympics in Sochi is another testimony to the gross inefficiency and state-run corruption of epic proportions.

"...there are no such taxes for foreign firms' cars produced in Russia (and there is plenty of them)."

Plenty ? I know of THREE !
'Produced' means assembled from ready made foreign components. Most foreign car producers have separate facilities for different models serving international markets. Russian planners and industrial development 'experts' are still in the GOSPLAN era of 'one size fits all' mentality. It does not work in the 21st century.

The used car market exists by providing alternatives for consumers as well as business and employment for resellers, repair shops, advertising, financing, etc. Its a silly policy to use taxation to restrict used markets for anything, not just for cars.

Are you sure all of these bilionaires have been "produced" under Putin's rule? Many of them were not so poor even under Eltsin's "democracy". They just did not try to make foreign policy on their own (sell control on russian oil and gas to US firms and the like, y'know...)...

How did you manage to get 14 years ? Its 22 years !
In another 25 years there will be no Russian Federation. There will be new states all over the Asian landmass now occupied by the Kremlin. The colonial era is OVER !

True - bizarre. I guess I can only point to the time at which I wrote the comment (01:19) and plead tiredness/ intoxication. But that's a sorry excuse.

Well corrected.

On "new states all over the Asian landmass", it isn't at all obvious that there's much impetus for that. Sure, there are various separatist groups in Chechnya/ the Caucasus. But is there really the same drive in Vladivostok, Volgograd, Samara or St Petersburg? Are the Tatars going to develop a separate national identity any time soon?

I'm not confident in contradicting you, buy it would be nice to see evidence (your statement is quite bold).

"...there are no such taxes for foreign firms' cars produced in Russia (and there is plenty of them)."
Plenty ? I know of THREE !
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"God loves trinity", as they say...And you think that between pay more taxes or loose a big market and built up another factory in Russia, some other car maker will not think about the second option?
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The used car market exists by providing alternatives for consumers as well as business and employment for resellers, repair shops, advertising, financing, etc. Its a silly policy to use taxation to restrict used markets for anything, not just for cars.
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The resellers and repair shops are not such a source of workplaces as car industry. Too much foreign used cars, less market share for local cars (used or not), more risk of crisis and unemployment for local industries. For car dealers, to sell a car or another is exactly the same: they can sell Ford today and Lada Tomorrow, nothing changes. And however, ten car dealers shutting down are better than a single car factory doing the same. Dimensions do matter...

In another 25 years there will be no Russian Federation. There will be new states all over the Asian landmass now occupied by the Kremlin. The colonial era is OVER !
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Yes, 10% of chance, maybe...Most od Syrian people prefer Assad to the same idea to be ruled by Wahabite "insurgents". What makes you think Russians ("Russky" and "Rossyane", islamic included) are fooler that them?

"The close to $70 billion price tag of the winter Olympics in Sochi is another testimony to the gross inefficiency and state-run corruption of epic proportions."

The epic proportions will only become fully known when the Russian oligarchs directly involved in fraudulent deals transfer their billions in profits into West European and/or American banks
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What? With a 25% tax on these transfers stated by EU commission (your words, not mine)? Death before that...At this cost, better off pay the taxes at home...

Poland is about to have 7.5 billion a year regassing capacity in his plant in Swinoujscie. Both countries as well as most of the EU countries have significant reserves of shale gas
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You don't read TE with attention...The polish shale gas has already proved (some months ago) to be too deeply situated (and too legally jammed by polish property laws) to be REALLY profitable...And nobody says this is the one possible case of this kind...

I think you are right except that some have not yet been paid in full. Russian bureaucracy works at a slow pace. Besides, some will count major profits after collecting hotel rental fees, nightclub revenues, vodka sales, provision of female 'escorts', etc., all this and more during the short Winter Olympics.

"And however, ten car dealers shutting down are better than a single car factory doing the same"

The single car plant that will have to close is the one that produces Ladas that few people want. Unless, of course, government taxation will make most other cars prohibitively expensive for an average Russian resident, except for the bribes-collecting 'elite'.

You never know, as the technology keeps changing and advancing almost on the monthly basis. What is not economically viable today may be highly profitable one or two years later.
You didn't get my point, though. Russia has already lost the war for monopolising the EU energy market and, by most likely no later than 2020, will totally lose its pricing power and be reduced to a price-taker competing with other potential suppliers for the lucrative EU market. This will possibly trigger a kind of economic and political revolution within Russia, as it won't be able to keep pace with the global arms race which is still well and kicking. Bullying others will eventually backfire big time and Russia will feel the brunt.

" Are the Tatars going to develop a separate national identity any time soon?"

Indeed, the Tatars have not only developed a national identity but have their legislative and executive bodies governing the 3.9 million people of the Republic.

The republic has adopted three fundamental documents: a) the Declaration of State Sovereignty,
b)the Republic Constitution and c) a Treaty with the Russian Federation on Mutual Delegation of Powers. While these docs provide for political stability, in April 2002, Tatarstan adopted the revised version of the Constitution that obliges the Republic to observe and protect human and civil rights and freedoms.

The Tatarstan Constitution re-confirms the President as the Head of state of Tatarstan and the State Council (Parliament) is the supreme legislative authority of Tatarstan. One needs to recognise, of course, that its geographic location makes it mandatory to 'share' foreign and defence affairs with the Russian Federation. But Tatarstan is not Russia, nor is it another Chechnia.

Some factors seem to count against the likelihood of a large, strong & cohesive nationalist movement:
- the majority of Tatars live outside Tatarstan. And there is some broad geographical dispersion.
- while a large minority of Tatars speak (Turkik) Tatar as their first language, the majority speak Russian (as first language)
- while many Tatars celebrate Turkic heritage, many focus (quite violently at times) on the Bulgarian ethnicity of the Volga Tatars (i.e. they are mostly descended from the (Slavic) Bulgars that settled the area before the Tatar language was brought by the Golden Horde)
- while the majority of Tatars are Muslim, a large minority are atheist and a small minority are Christian

I don't underestimate the ability of misgovernance from Moscow to solidify ever larger numbers of Tatars behind a strong independence movement. But things will probably have to get pretty bad first (say, a 40% fall in gas & oil prices without compensating increase in export volumes).

'Poland is about to have 7.5 billion a year regassing capacity in his (its) plant in Swinoujscie.

Yes, and keep in mind there are now 19 countries capable and willing to deliver LNG to the market. Gazprom is way, way down on the long list of LNG suppliers. In a few years time Gazprom can get ready to re-use most of its pipes for steel scrap, assuming it will make economic sense for any steelmakers to pay the delivery costs of Gazprom's scrap to foreign steelworks.

Yes, you're right. China is now the owner of the largest fleet of LNG tankers and one of their largest builders. The US plans to build up to 30 NG liquefaction plants, one in Alaska that will work for the Asian market. Also Canada just closed a deal with Malaysian Petronas on construction of a similar plant some 800 km south in Kitimat, BC, destined to export LNG to the pacific Rim countries, mainly China.
LNG tankers are more expensive to build but more efficient to run and basically self-contained, as the gas that evaporates from LNG tanks and cools their content is used to propel the engines of the tanker. On the BTU equivalent basis LNG tankers are more than twice as cost efficient as oil tankers and environmentally safe. The LNG revolution will render most compressed NG pipelines obsolete as tankers did with most oil pipelines, as the liquefaction, tanker shipping and regassification add only between $40 to $70 per 1000 cubic metres to the cost of gas delivered to the liquefaction plant.
Putin and his kleptocracy didn't see the writing on the wall and, now, Russia is at least a decade behind other NG producers in the LNG department.

a) the Chinese spend more on their internet censorship capabilities (they have roughly 1 full time active duty censor for every 200-300 internet users), and the censors they do employ are more efficient. I wouldn't say that this transparency is intentional though. If the Russian government had the same technological capabilities as the Chinese to do so, they would use them.
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If the russian authorities invest less money in the control of the web than chinese do, it means they DON'T WANT to strictly control the web. (no 1984, please), while chinese authorities want. Put your money where you mouth (and your goal) is...

to Observer48 somewhat off topic on markets being barometers of the economy.

I apologize for replying to you here but, as you know, a long line of comments, including yours and mine was deleted in the other thread with the invitation to reposting them.

No need to repost, but following the chat seems interesting.

In the sixties, some young engineers working for huge chemical plants used to say economy and attendant finance were similar to those big processing factories.

You had the real “process”, say transforming raw phosphates just mined into sulphuric acid, an you had a complicated system of gauges, flow-metres and other instruments that would control valves, heaters, vats and so on. A new word, automation, had just been coined for the system.

Their idea was that finance fine tuned the real economy just as automation fine tuned “process” (viz. the making of sulphuric acid from phosphates).

A refinement to your non engineer's expression that markets are barometers of the economy. (Barometers only measure air pressure generally irrelevant for chemical processes; manometers measure liquid and gas pressure inside pipes or vats).

The only trouble is that automation occasionally goes awry and then you have to fix the process flow acting directly on valves, heaters and so on.

The same happens in economy and finance: two examples of it are the Great Depression of the thirties and the Great Recession of 2007 (not 2008 as popularly believed).

Finance went awry and instead of manoeuvring the valves directly, authorities fiddled with barometers.

Results were awful as we all know.

Now, this doesn't mean I'm against markets or trading on them.

They are the most useful method we know of running an economy: they allocate resources, money included, in the most efficient manner if markets are not manipulated (as they can be) or don't go wrong, as often can happen.

Even speculation, if not abused, is useful: it acts as a shock absorber by withholding resources when they are plentiful, releasing them when they are in short supply.

Even gambling is useful: it satisfies a human urge as respectable as sport, liking grand music or loving to sail.

The problem is when we abuse any of those: markets go awry, disasters happen.

This usefulness of markets and trading on them allows you to make more money from a hotel room than a doctor on a blood stained operating table.

Good for you: you are helping to allocate resources efficiently.

But never forget Benoît Mandelbrot's Ph D thesis. For some reason, IBM, not known as a spendthrift, paid him a good salary, a small lab and office just to think...

And despite not being in their best moment, IBM survived with flying flags a great depression and a great recession that we have the illusion it is finished.

I know what you're coming from, as I started with a Master's engineering degree before I got my MBA. I should have written that markets are gauges of the economy, not barometers. We also need to recognise that perfect competition doesn't exist and lobby groups as well as criminal activities like Mafia and institutional corruption can distort economies beyond recognition.
I believe you've read and excellent analysis of the US political system (politicians are the worst enemies of free market economies) written by the late Mancur Olson "The Rise and Decline of Nations".
I also agree that finance moved away from rational financial management of the economy towards speculation, and one of its newer disciplines financial engineering focusses mainly on designing new financial derivative products.
I don't remember the name of the US economist who wrote a few years ago that no more than 10% of money in global circulation buys goods and services because the remaining 90% is diverted towards speculative activities aimed at making more money without creating any value added. I have no choice but to agree with him.
I can see that you fully understand capital markets and their role as inflation alleviators (95% speculators lose money while the hedgers enjoy relative price stability).
Coming back to Ukraine it's just been invited to join the Visegrad Group by Czech President and is about to sign a deal with Chevron that can change the European NG supply landscape and send Gazprom in a tailspin within less than a decade http://www.ft.com/intl/cms/s/0/06fe2f60-3966-11e3-a3a4-00144feab7de.html...
I't nice to exchange thoughts with you, Sir.

You never know, as the technology keeps changing and advancing almost on the monthly basis.
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In the computer industry, maybe. Not in drilling technologies. Besides, shale gas is not only a matter of new hi-tech drilling machines: it's a geological and financial headache. Wells dries up very quickly (and also quickly loose profitability), it's hard to think some technology can avoid it, credits with the banks have to be repayed, and the one thing for do it is drilling compulsively new wells, to get more oil and gas, untill they too dry up. And that means more expenses, more IOU, and so on. With all the good (politically talking) will, no bank has a saint Patrick's well in its backyard, sooner or later the financing flood has to stop. And then, you can have still all she shale gas you want beneath your feet (let alone the case you have it no more), but...

Sorry to rain on your parade, but I have followed the shale gas and horizontal drilling technology mixed with fracking for over a decade now.
You seem to live in the US without realising that shale gas is extracted there for over 70 years now and over 60% of gas and oil is extracted world-wide, also in Russia, with the application of fracking. The new horizontal drilling technology that is highly affordable in the US is not allowed to be transferred to Russia.

...that no more than 10% of money in global circulation buys goods and services because the remaining 90% is diverted towards speculative activities aimed at making more money without creating any value added

Neither do I remember his name but lost deep in my post history there's a rule of thumb calculation that a not dissimilar figure applies to the total forex market.

We both agree with him.

This an excellent example that I have repeated ad nauseam in these pages during the silly Euro war. I don't think I've convinced anyone, but very few posters have MSc Eng degrees. I'm sure you'll get my two interwoven points.

(A declaration of interest: ever since its inception, I was of the opinion the Euro had been introduced a tad too soon, obviously more than a tad too hastily.

Once it was introduced,however, doing away with it, could cause a disaster)

i)

If the Euro was replaced again by the then 17 original currencies, Forex trading would collapse for possibly an extended period owing to the simple maths of transactions: net profit of transactions is directly proportional to their volume and inversely proportional to their number.

Easy to explain: if you have, say, a margin of 10% in one type of transaction, and you transact ten million dollars, your income (forget niceties and subtleties) is one million. If the transaction you broker is worth twenty million dollars, your income is obviously two million dollars. QED for the easy part: profits are directly proportional to volume of trade.

Now, your expenses per trade are mostly one off: overheads of all types: wages, taxes, equipment and software write-offs.

So you spend (mostly a fixed amount per trade and again forget niceties and subtleties) one dollar per trade. If you trade a volume of 10 million dollars in, say, 1000 trades your expenses are 1000 dollars.

It you trade 10 million dollars in a million trades, your expenses are one million dollars and pop goes your profit.

Now then, as maths lecturers like to say: if you just trade US dollars against the Euro and the Euro goes back to the 17 original currencies, it's unlikely volume goes up but your expenses will be multiplied by 17.

But you now have to trade the original 17 currencies against the other 200 currencies of the world.

No need for combinatory analysis: your expenses will go up by 200 times 17 or 3400.

You now start swallowing dry air.

But obviously that's not all: with the Euro you have no forex trades among the 17 economies but if you go back to 17 different currencies they have to be traded among theirselves as they'd say up in Salford,Lancs.

That's factorial 17 or something close to 175 trillion times. Are we sure all forex traders in the world now all responding frantically to every advert in the net “become a trader like a professional” have any idea of what this means? The CDO fiasco a trillion times worse.

ii)

Who's more at risk if such a silly thing was conceivable?

Forget Luxembourg, Lichtenstein, Singapore and other small economies that will present distortions caused by their smallness. In fact ignore any economy that has a nominal GDP lower than 700 billion US$ for simplicity's sake.

Now take their share of World GDP. For instance, the USA produces roughly 22% of the world GDP. France 3.6%. Japan 8.3%.

Next, take the share of each country of the world forex market. For instance, the USA trades some 17% of the total, France 3%; Japan 5.9%.

If you do that for all sizeable economies, as I once did but won't repeat, you'll find a curious ratio: for all countries with one exception, the share of the world forex market is always a bit lower than that country's share of the world's GDP. It's occasionally close to 1 to 1 or a little above but for the vast majority of cases it's well below.

The exception is Britain. Britain had 37% of the world's forex trade a couple of years ago, (apparently 40% now) and a share of 3.4% of the World GDP. A ratio of over 10 to 1.

Combine my points i) and ii) and you'll come to an easy conclusion: if the Euro is replaced by original currencies in less time than it took for it to be established (around 11 years) two countries will be heavily hit: the USA by sheer numbers, Britain by the impact on its forex over, over, over dependency.

The USA will have a small tornado; Britain the largest tsunami ever. Her foreign debt, the largest in world, will make the destruction much worse.

Let's hope the Euro never goes away despite its many admittedly big flaws. We would need one thousand Germanies to put Humpty Euro back together again.

Two final little smiles: sorry for late reply; I still help to run a couple of companies and was away from my PC's. Hand held gizmos don't fit my eyesight requirements anymore.

And, please don't “sir” me: I'm an 82 youngster.

Apologies for the long off topic post but it is a pleasure to talk to you.

I bought a bunch of puts on SPY, QQQ and all major US banks yesterday (didn't buy anything on hi-tech because the premiums are ridiculously high) and am waiting for a short, but brutal pull back on all US markets extended by the Fed's money-printing spree, especially in light of the ongoing earnings season where any nasty surprise in earnings of an even average importance company can sent the indices and financials in a short but very brutal tailspin, as it may be combined with the US tax loss sell off period.
BTW, it's a common practice that even major Forex brokers and banks let you leverage your bets 1:100 during the week and reduce to 1:30 over weekends. Imagine a tsunami like the catastrophic one in Japan and you're in a carry trade short JPY long AUD even at 1:30. You'll get wiped out at no time if you're not well-capitalised.

Here's the link to the most recent inventory of 194 LNG carriers that are up and running as well as those under construction, even with the breakdown into NG-heated steam engines, dual diesel/NG propelled engines and diesel/NG/electric ones: http://shipbuildinghistory.com/today/highvalueships/lngactivefleet.htm
Do you think that so many technologically-advanced countries would have built so many LNG tankers without long-term prospects? BTW, most newly-built carriers have de-liquefaction plants built into them. The global fleet of LNG mega-carriers will increase by over 50% by 2016. Don't you and Gazprom's BOD see the writing on the wall?